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Acquisitions
 3 Months Ended
Mar. 31, 2014
Business Combinations [Abstract]  
Business Combination Disclosure Text Block

Note 16 – Acquisitions

On June 3, 2013, the Company acquired all of the outstanding common stock of Suntron Corporation (Suntron), an electronics manufacturing services (EMS) company headquartered in Phoenix, Arizona (the Suntron Acquisition) for $19.3 million in cash, subject to a final purchase price adjustment in accordance with the acquisition agreement. The Suntron Acquisition added two manufacturing facilities: Tijuana, Mexico and Phoenix, Arizona. The Suntron Acquisition strengthened the Company's capabilities and global reach to better serve customers in the aerospace and defense industries.

 

The preliminary allocation of the Suntron Acquisition's net purchase price resulted in no goodwill. The final allocation of the purchase price, which the Company expects to complete as soon as practical but no later than one year from the acquisition date, may differ from the amounts included in these financial statements. Management does not expect the adjustments resulting from the purchase price allocation, if any, to have a material effect on the Company's financial position or results of operations.

 

The following is an estimate of the purchase price for Suntron and the preliminary purchase price allocation (in thousands):

Purchase price paid$19,332
Cash acquired (62)
Purchase price, net of cash received$19,270
   
Integration and acquisition-related costs for the three months ended March 31, 2014$7
   
Recognized amounts of identifiable assets acquired and liabilities assumed:  
Cash$62
Accounts receivable 11,561
Inventories 14,686
Other current assets 1,072
Property, plant and equipment 1,869
Other assets 255
Deferred income taxes 3,893
Current liabilities (13,785)
Other long-term liabilities (281)
Total identifiable net assets$19,332

On October 2, 2013, the Company acquired all of the outstanding common stock of CTS Electronics Manufacturing Solutions, Inc. and CTS Electronics Corporation (Thailand) Ltd., the full-service EMS segment of CTS Corporation (CTS), for $75 million (the CTS Acquisition). The acquired business had five locations (4 in North America and 1 in Asia) and approximately 1,000 employees. The CTS Acquisition expanded the Company's portfolio of customers in non-traditional and highly regulated markets and strengthened the depth and scope of the Company's new product express capabilities on the West Coast.

 

Based on management's estimates resulting from review of information obtained after the acquisition date that relates to facts and circumstances that existed at the acquisition date, the purchase price allocation was adjusted resulting in additional goodwill during the three months ended March 31, 2014. See note 4 to the condensed consolidated financial statements for additional information. The allocation of the CTS Acquisition's net purchase price resulted in $8.1 million of goodwill. The following is an estimate of the purchase price for CTS and the preliminary purchase price allocation (in thousands):

Purchase price paid$75,982
Cash acquired (981)
Purchase price, net of cash received$75,001
   
Integration and acquisition-related costs for the three months ended March 31, 2014$1,921
   
Recognized amounts of identifiable assets acquired and liabilities assumed:  
Cash$981
Accounts receivable 32,480
Inventories 40,494
Other current assets 1,472
Property, plant and equipment 15,175
Goodwill 8,058
Customer relationships intangible 15,500
Other assets 129
Deferred income taxes (1,620)
Current liabilities (36,687)
Total identifiable net assets$75,982

The following summary pro forma condensed consolidated financial information reflects the Suntron and CTS Acquisitions as if they had occurred on January 1, 2012 for purposes of the 2013 statement of income. This summary pro forma information is not necessarily representative of what the Company's results of operations would have been had these acquisitions in fact occurred on January 1, 2012 and is not intended to project the Company's results of operations for any future period.

 

Pro forma condensed consolidated financial information for the three months ended March 31, 2013 (in thousands) (unaudited):

     
Net sales  $613,813
Net income  $9,668